Stocks to Watch

Converted Organics Inc. (OTC:COIN, COIN message board) is engaged in the development and operation of clean technologies. It used to be a NASDAQ company, but as of yesterday it is traded on the OTCBB.

COIN’s last day on the NASDAQ was marked by a 190% surge on 46 million shares, about 50% of the outstanding shares of COIN, according to the latest 10-Q. Yesterday, however, the price dropped 31.72%. COIN closed at $0.099 on 10.6 million shares.

Before being delisted from the NASDAQ, COIN had been steadily losing its value for over a year. There are plenty of reasons for the devaluation.

While the company had operations and revenues, the result of its operations has been negative. During 2010 COIN burned through $16 million from operations alone; the losses from discontinued operations were staggering $34.6 million.

In reality, the delisting isn’t going to affect the operations of COIN directly.

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The chart below shows the 23-day SMA for the Dow Industrials. There are around 23 trading days per month and this represents a rolling monthly average. It also smooths daily volatility.  The March 2009 low was around 10% below the March 2003 low and the July 2011 high was around 10% below the October 2007 high. 12000 marks the first support to watch for this moving average.

Today’s tickers: AEO, AMKR, SWFT & ELX

AEO - American Eagle Outfitters, Inc. – Options on apparel retailer American Eagle are some of the most active today after one big player traded 65,000 February contract call options on the stock. Shares in the name surged 9.1% to an intraday high of $14.32 after June retail sales for apparel and teen stores came in far better than estimated. The run up in the price of the underlying today as well as the rise in implied volatility on the stock seem to have set the stage for the massive position initiated in AEO options. The trader sold some 65,000 calls at the February $15 strike, against nearly nonexistent open interest, to pocket premium of $1.10 per contract. Premium received on the trade amounts to $7.15 million, which the investor keeps as long as the calls expire worthless at expiration next year. The i

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When it comes to stocks, it’s easier being a buyer than a seller. As subscribers to my Instant Alerts know, when I look for investment ideas I first try to determine whether the market is trending or if it is stuck in a trading range. Next, I search for stocks that have not yet but are about to break or have broken above significant (meaning, longer-term) resistance levels. I especially like stocks moving into all-time new high territory. Once I find such a stock, I will try to hold on to it as long as I can; I try to hold the stock until I’m compelled but weakness in the overall market to begin moving onto the sidelines.

Perhaps a few examples since this phase of the bull market began in August, 2010, demonstrate how this strategy actually worked (click on images to enlarge):

• MWIV – the stock that’s been in the portfolio the longest was purchased on 6/1/10 after it broke into all-time new high territory.

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Companhia Paranaense de Energia (ELP – Analyst Report), also known as COPEL, recently announced that the company has been granted approval for an average tariff adjustment of 5.55% by the National Electric Power Agency (ANEEL), Brazil’s Electricity Regulatory Agency.

The company also added that the tariff adjustment was approved through a resolution 1,158 of June 21, 2011 and includes annual adjustment of 5.77% and (0.22%) related to the relevant financial components. The 5.55% tariff adjustment will have 2.99% average effect on captive consumers.

We believe Brazil’s economic outlook is strongly-favorable for the electric utility company as the country is investing to improve its infrastructure and power generation capabilities. In

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06-Jul-11 15:40 ET Dow +39.65 at 12609.52, Nasdaq +4.38 at 2830.15, S&P -0.54 at 1337.34

Precious metals extended their respective rallies to a second session, with August gold gaining 1.1% to settle at $1529.00 per ounce, while Sept silver rallied for 1.6% to end at $35.97 per ounce. Despite strength in the dollar, both metals moved higher in light of yesterday afternoon’s news that Moody’s cut Portugal’s debt rating, as well as inflation concerns following a rate hike in China.

It was an uneventful session for August crude oil, which shed 0.3% to close at $96.65 per barrel. Crude spent the session chopping around the unchanged mark, as the market awaits tomorrow’s inventory data, as well as Friday’s jobs data. August natural gas finished lower by 2.7% to $4.22 per MMBtu.